The IDC report notes that the shortfall in shipments allowed the disk drive makers to reset their pricing, raising their profits at the same time that the higher prices contributed to a slow-down longer-term price erosion. From the report:
A reset of the HDD industry structure should allow for the remaining HDD industry participants to slowly reduce HDD prices from current levels at a rate that still delivers value to customers, while at the same time ensuring sufficient funding is available to develop new HDD technologies that are needed to improve HDD capacity, performance, reliability, power consumption, and security.
One interesting observation in IDC’s report is that the disk drive market will revert to the model of its early days, when large enterprises will once again be the major consumer of disk drives and the largest contributors to disk drive revenues. The PC and consumer electronics markets will continue to have a solid demand, but declining prices for disk drives in these sectors will hurt disk makers revenues.
The IDC press release is available here.
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